Money Rehab with Nicole Lapin - “I turned my hobby into a jobby. Now, how should I price my products?” (Listener Intervention)

Episode Date: December 24, 2021

Today's listener did the thing: he turned his hobby into a jobby, and is selling his art. Now he wants to know... how much should he sell it for? Nicole jumps in with a tip that will help make it rain.

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Well, it doesn't. Charge for wasting our time. I will take a check. Like an old school check. You recognize her from anchoring on CNN, CNBC, and Bloomberg. The only financial expert you don't need a dictionary to understand. Nicole Lappin. Before we get started, I wanted to say Merry Christmas Eve to everyone that celebrates

and wishing all of you happy, happy, happy, happy holidays. I hope you're surrounded by loved ones and you get to wear your fuzzy PJs all weekend or heck, all week. You know, that work-from-home life. Okay, let's get into it. It has been so fun for me to read your comments on Apple Podcasts and to get your emails and DMs. It really, truly makes my day getting to read all of your stories, so thank you. After releasing episode 37, Turn Your Hobby Into a Jobby, I heard a lot of stories of people getting serious about their side hustles. One of the obvious metrics to assess whether your hobby can become a jobby is whether you stand to make real money from it. If you want to explore the possibility,

you'll have to ask yourself questions like how or how much? These are some of the questions we'll be going over in today's listener intervention. So, Kevin, welcome to Money Rehab. Well, thank you for having me. Tell me a little bit about what's going on. Well, several years ago, I came off a deployment and had a bunch of my sketchbook. So we put together some children's books, kind of a hobby, launched them on Amazon, self-published, and they did pretty well. Years down the road when COVID hit and we kind of reconvened, I'm one of the few artists that still do actual physical paintings. So we got together, started working on some books and thought that, you know, we have the original paintings left over. How do we sell them? How do we market them? How do you price them?

And I did a little bit of work looking around on the web. And there doesn't seem to be a consensus on how an individual artist goes about pricing their work and finding that. So I thought listening to your podcast, I thought this might be a good topic for that. It's a great topic. And finding that. So I thought listening to your podcast, I thought this might be a good topic for that. It's a great topic. Can you tell me a little bit more about what you're selling and how much you're selling it for and where you're selling it now?

Okay, great. What we do is Amazon has a platform by which you can generate your own material and self-publish it. It sits out there and generates income. You make the books, you put them out there, you market them. People can go to Amazon, purchase them, and then you just receive profit from that. there and generates income uh you make the books you put them out there you market them people can go to amazon purchase them and then you just receive profit from that and we did that uh with two books about a decade ago and then they're still making a profit they're still coming in so when a pandemic hit and we were kind of forced to you know stay home uh we really thought okay let's make some let's lean into this and make some really great books.

And we realized we had all this original artwork left in, all these paintings. And we had never really wandered into that arena. Like, how do we sell the original paintings? A lot of people are saying, just read your market. But that opens several other questions. You mentioned different markets. Do you have an idea of where you want to sell? Have you asked those customers how much they would want to pay? In other words, have you tested your product? Yes. We were really lucky in that the work that I do is aimed at a very specific genre.

So they have conventions and there are existing publishing houses and collectors for that kind of work so i started out there so we knew we had it we had an audience uh and we're in the process now kind of broadening that we started out with the steampunk market and we did pretty well with that and i really like i'm getting into the the retro sci-fi stuff so So, and it, um, it's gotten quite a lot of, um, quite a lot of attention, but we, I'm not sure I haven't because of the pandemic, obviously I haven't been able to go out to, to shows and what have you promote that yet. So it got us wondering, I sell mostly, uh, illustrated work, like an artist. I mean, an author will approach me and say, Hey, I've got this idea. And then we'll negotiate a price on

that. Uh, and then I usually will negotiate into the price if they want to keep the original work. But in this case, I'm the author making the book, so I have this leftover paintings, and that's where I was wondering about how to go about getting a price on those. Have you tested your pricing? I'm going to go ahead and say no, not necessarily. Not on the original work. Okay. That's my biggest suggestion to you is to test. Test, test, test, test, test. It sounds like there's already a need for your product or a audience for it or there's some demand for it. Oftentimes when people are starting businesses or side hustles, I suggest to test that first.

You know, this is not a new concept. When the two founders of Airbnb started their company actually as a side hustle just to pay rent, fun fact, they didn't just get out of bed and, you know, throw everything behind their idea thinking that it's the greatest idea in the history of the world, which a lot of entrepreneurs do because it's like their baby. They tested it first. You know, they set up a basic website with pictures of their extra room and images of the air mattresses and, you know, whether or not they could include breakfast or not. And they really analyzed what that traffic looked like before they left their jobs and went into this business in a big way. So I would suggest to test, test, test anything you're planning on doing as a side hustle, as a potential business. Ask people if they want that product. You know, you may think that there's a huge demand. You may be right. You may be wrong.

And so there are a lot of different ways you can ask people about that. A basic way is do a SurveyMonkey. Anytime I launched another product, I would do SurveyMonkey testing to figure out how much to price it at. I didn't just come out with a price out of my patootie. I asked people what they

would pay. That's a great idea. So set it up, you know, on SurveyMonkey. It costs a little bit of money. But honestly, the data that I got personally for things that I was launching was invaluable. It was well worth the fee that I paid to set up the survey. It went out to people that were in my target demo. I asked them how much they would pay. Ultimately, interestingly enough, I sort of overrode what I found in some of the data because I was selling, for instance, in the last survey I did, I was selling a financial class. I found, shockingly, that people would actually spend more than I thought, which is high class problems. I didn't feel personally comfortable pricing a class about money at a higher level because I was teaching people how to make money. But I was totally shocked at the numbers.

It was definitely not what I expected to see. So you could be shocked either way. But you just don't know until you do it. Okay, that's great. You know, there are a lot of different ways that you can pull people. SurveyMonkey is just one option. You can obviously use free tools on social media. You can just ask people on your social media, how much would you pay for this? You could send out a little survey through any email list you might have and ask people what they would pay. You could come up with a few different options.

You could show them an example and you could say, hey, would you pay, you know, 100 bucks, a thousand bucks, a million bucks for this? And then you'll get a lot of data. You can be creative depending on your product. I talked about this in one of my books where this popular UK beverage company called Innocent Drinks, they tested their product at a music festival. And after people tried their smoothies, they could throw the empty cup in two different trash cans, yes or no. And the question was, should I give up my job to start this business? And at the end of the festival, the yes bin was overflowing. And that was enough to have them leave their jobs and chase their smoothie dreams. So depending on your business, you don't necessarily have to spend a bunch of

money. There are a lot of different tools you can use to spend a lot of money, Nielsen and other things, but you don't have to. Especially if you don't have the money to spend, you can use to spend a lot of money, Nielsen and other things. But you don't have to, especially if you don't have the money to spend. You can get creative. Hold on to your wallets, boys and girls. Money Rehab will be right back. Now for some more Money Rehab. Well, one of the things that we thought about doing was incentivizing, kind of our getting people to contribute information to help us build our database.

And so we made decals of some of the artwork, sent them out to people who have frequented us in the past, basically just kind of increase our awareness. And then maybe that's something we could do. We could incentivize people to say, hey, give us some feedback and we'll draw from those people who answered us and they'll get a package of decals or shirts or what have you and mail it. Still kind of increasing our brand. It's a great idea because that's actually what a lot of survey companies do anyway. When I was in college and had no money, I would sign up, you know, on the little bulletin boards for those surveys. I would take the number from the sheet that had a bunch of little, you know, things coming out of it. And I would sign up to do like science surveys and all sorts of weird stuff for 20 bucks an hour. And so you could just take that into your own

hands and say, here's how I'm going to compensate you. You can ask your friends and family. Oftentimes you're not going to get the most unbiased answer or honest answer from them. So that's why I think finding strangers that are in your demo and compensating them is where you're going to get the best information. And that's what survey companies do. I mean, people don't do this out of the goodness of their hearts. This is not, you know, charity. And so if a survey company is going to pay somebody or give somebody a gift card, there are a lot of sites where, you know, you can sign up and be a person who takes a survey and get stuff. But you could also do that essentially yourself where you're

getting something of value in exchange for your time and your opinion. Great. Well, it seemed that the thing to do would be to maybe do this sort of annually, because as I mean, when you start out marketing artwork in particular, I would think that the market would evolve and you might want to occasionally test and see if you can charge more or if you're underselling yourself. Absolutely. And, you know, there could be a time where there's no demand. You want to be really honest and, you know, there could be a time where there's no demand. You want to be really honest and, you know, use that information as a place to pivot. You can, you know, check analytics from any website that you might set up. You can also create a small budget

for Google AdWords for your product. You know, so you can get an ad, let's say, in literally two minutes where you can see which keywords get the most traction for you. You can look at metrics like conversion rate or the number of people who actually signed up for your product after seeing the ad. So all of these stats will help you understand how much money you need to throw down to acquire a customer and whether or not it's worth it. There are a lot of companies that are so-called zombie companies where they're just trudging along and they look like death. That's why they're called zombie companies.

And I think a lot of those companies would be revived or come back to life if they did some basic testing where they looked at metrics for their most optimal success. So I did a show called Hatched, which was different from Shark Tank, where we heard pitches from entrepreneurs, but they were all consumer products. So we tested them in a retail environment, and we looked at what those surveys were from people who came and interacted with the product before making a final decision because that consumer feedback is so, so important. I wouldn't suggest this to anyone who asked me about how to price their consumer product, but have you looked into NFTs? I was going to ask you about that. That's all the rage right now. I'm hearing that from a

lot of artists. I don't do digital work, but obviously you can take a painting and photograph it and render it. A lot of people are curious about that. Right now, I'm going to wait and see how it develops. I listened to your episode about it. It got me curious. I'm still hanging in there. I think that there's some potential.

I think it's going to shake out in a form that's sustainable in a little while. But I would be really interested in the next steps with that, because obviously, if you look through my stuff, I tend to focus on distinct characters that lends itself well to the NFT market, I would think. Yes, there have been a lot of successful NFT series that are character driven and that they have limited amounts. A lot of them, I will be honest, you know, have the artist or the creator with a large social following or base or, you know, some celebrity behind it. But I don't think that there's much to lose if you want to even test and see. Again, my biggest takeaway from

our entire conversation is test, test, test. So if you don't know, I don't think there's much harm in testing and seeing what happens. You could be surprised and actually make quite a bit of money from it. Great. I agree. I think it's worth looking into. Well, you've given me quite a bit of money from it. Great. I agree. I think it's worth looking into. Well, you've given me quite a bit to think about. I'm so glad. Yeah. I certainly appreciate you making the time because we've got a little bit to rethink here and come up with a plan, but we definitely know more than when we started. So thank you so much. For today's tip, you can take straight to the bank. Don't treat your pricing strategy like pin the tail on the donkey. You don't need to put a blindfold on and take a random guess at your price point. You can and should ask people how much they would be willing to pay for what you're selling. Plus, it's an early initiative to start

engaging with your new customer community. And an engaged customer community is a recipe for jobby success. Money Rehab is a production of iHeartRadio. I'm your host, Nicole Lappin. Our producers are Morgan Lavoie and Mike Coscarelli. Executive producers are Nikki Etor and Will Pearson. Our mascots are Penny and Mimsy. Huge thanks to OG Money Rehab team, Michelle Lanz for her development work, Catherine Law for her production and writing magic, and Brandon Dickert for his editing, engineering, and sound design. And as always, thanks to you for finally investing in yourself so that you can get it together and get it all.